1. D Cinema in Europe – Stalled? An EDCF Overview David Monk, EDCF Gerald Buckle, Odeon Cinemas Michael Lambrechtsen, NFC

2. EDCF Membership organisation with common interest in successful deployment of Digital Cinema. Includes: Exhibitors, Distributors, Studios, Analysts Consultants, Integrators, Technicians Cinema-goers.

3. D Cinema - Stalled? Let’s take a quick look at the installation progress with the help of Screen Digest’s ongoing tracking database. These will be installation of D Cinema systems in commercial theatres: Our thanks to David Hancock & Screen Digest david.hancock@screendigest.com

4. D-cinema screen growth by world region All data taken from Screen Digest Cinema Intelligence service

5. Digital Cinema: Leading international territories

6. Digital Cinema: progress in Europe slow DCI

7. Digital Cinema: areas of progress in Europe UK DE FR BE RU

8. Stalled? Clearly not ‘stalled’ and some clear progress in certain countries like Russia, Belgium, UK, France System Integrators also moving forward: –Arts Alliance July UK 250 France 60 40 Norway 16 Spain 5 Total 326 – XDC now offering a new VPF deal.

9. ‘Stalled’ – Clearly Not but Disappointing Why so? It’s not because of worries about: –Image quality –Sound quality –Reliability & Dependability –Maintainability –Not fitting into the physical environment –Installation problems –Lack of digital content

10. It’s not because, Exhibitors don’t appreciate Importance of competitive advantage. Need to invest in future. New Digital Entertainment opportunities in Live Events, Concerts, Stage Shows, Sport, etc Further Multiplex Integration opportunities. Programming flexibility of Digital Screens. Opportunities in Pre-Show Marketing.

11. It’s not because, Studios don’t appreciate Advantages of digital production. –Quality consistency –Format accuracy (colour and framing) Threat of new entertainment competition. Importance of bringing everyone forward on digital journey –Cinematographers & Post Production –Directors & Producers. Need to produce digital content at extra cost. Need for a single digital presentation specification.

12. It’s not because, Distributors don’t want to Avoid escalating print costs. Recognise the impact of consumer film demand on professional resources and technology development. Reduce environmental impact of film processing. Engage in new media opportunities. See the opportunities for lower budget movies to deliver on big screens.

13. It’s not because there is no good Integrator support who … Can provide the finance. Manage the studio obligations. Manage the technology risks. Help with local content mastering Install systems. Provide training, help lines and maintenance.

14. Virtual Print Fee Addresses the dilemma of how to legally share the financial benefits of print cost avoidance and more flexible screen presentation technology. Financial mechanism accrues balancing funds on a movie by movie basis. – Works best for highest grossing screens. – Struggles for medium sized screens. – Doesn’t work for most small independents.

15. Geo Political Issues Europeans are concerned about lack of inclusiveness in VPF model. Community ‘owned’ cinemas moving forward with integrated plans – Norway. France & Germany trying to leverage their cinema levy to produce an inclusive consensus. –Hoping for government support. –Needs EC competition law approval. –Consensus amongst the parties.

16. Commercial Drivers Business owners worry about losing competitive advantage. –versus other entertainment –versus other cinema groups –missing new media opportunities –missing ‘stereoscopic’ exclusive window Risk of VPF deals reducing in second wave. Risk of being supply limited when mainstream go –Equipment, Optics, Installation resource.

17. Stereoscopic 3D 3D movie opportunity is now creating an urgent imperative. Studios under pressure from movie makers to unlock VPF negotiations. Exhibitors under pressure to capitalisee on early demand and opportunity to lift box office. Distributors stuck in middle. Supply capacity will be an issue with 2009 releases.

18. Residual Issues World financial crisis Limited Competition in Europe –XDC now in the ballgame –No-one has all; six major studios (see XDC announcement at the show) Direct Studio deals not practical for majority of circuits and owners. Anxiety over ‘requirement’ changes –SMPTE conformity –Interpretation issues, varies by studio. Current VPF deal is just not compelling!

19. Time to Invest in D Cinema? Not stalled but slowed. Financial situation making it harder. All other vectors are positive: –New technology lowering system costs –Studios pushing for deployment –Cinemagoers excited by Stereo 3D –Standards are closing. –Integrators can offer proven systems and mitigate the risks Right time to invest in the future?

20. D Cinema in Europe – Stalled? An EDCF Overview David Monk, EDCF Gerald Buckle, Odeon Cinemas Michael Lambrechtsen, NFC